Fran O'Sullivan: PM off to woo Hollywood big boys

Protecting the NZ film industry will be higher on John Key's US agenda than the daily Dotcom soap opera

Prime Minister John Key has a raft of influential film industry players on his dance card. Photo / Mark Mitchell

It has all the trappings of a hit movie - "Johnnie goes to Hollywood" - in which the Kiwi hero tries to inject more lifeblood into the NZ economy while a Great German Hulk flails about claiming New Zealand is in danger because US moguls are conspiring to capture the hero in their net.

No prizes for working out who the Kiwi hero is and who is the Great Hulk.

We've been watching John Key and Kim Dotcom battling it out on television screens nightly for the past week or so.

The conspiracy allegations against Key are over-egged.

But even before the revelations that the Government Security Communications Bureau had unlawfully intercepted Dotcom's communications when they were trying to pin down his whereabouts for the FBI raid - Key had presaged the likely reaction from some segments of the community.

It is clear that the Prime Minister's trip to Los Angeles was planned well before the latest episode in the Kim Dotcom saga.

Key talked about it to respected journalist Guyon Espiner in a recent Listener profile where he said his upcoming trip would "really wind people up".

"They now want me to go to LA and see Fox and Disney and a whole lot of other major studios ... the word in Hollywood is that we are really supportive of the film industry to the point where the Prime Minister of the country would actually engage himself in negotiations to make sure those movies are made," Key told Espiner.

Key told me as much during a recent trip to Japan.

And despite a breathless journalist claiming I had "blown Key's official cover" when I told TVNZ's Q&A programme last Sunday that the Kim Dotcom saga would inevitably come up when the Prime Minister went to Los Angeles, this was hardly a cloak and dagger secret.

Key confirmed further details to me relating to Espiner's piece while on the road in Japan a fortnight ago, but all that gets lost in the current drama where hyperbole is stacked on hyperbole.

So what's all the fuss?

Film New Zealand is capitalising on the strong relationship that the New Zealand Government has forged with Warner to support the country as a centre of excellence for screen production and post-production.

Key has a raft of influential film industry players on his dance card. He will be the guest of film-maker James Cameron and his business partner Jon Landau at a private dinner of studio heads, he will be calling in on Walt Disney Studios, Sony Pictures Studios and Warner Bros Studios.

He will also meet heads and senior executives of Twentieth Century Fox, Paramount Pictures, Universal Pictures, as well as the Motion Picture Association of America, other major production houses and current clients of the New Zealand screen industry.

Key talked up the visit saying the NZ screen industry supports over 2700 businesses - 95 per cent of which are involved in production and post-production work.

He wants to keep New Zealand at the forefront of US investment. He will be accompanied by Leon Grice who is NZ consul in LA and a couple of staffers and a foreign affairs adviser.

This ought to ensure the required level of transparency for such a mission.

There is clearly a political risk in the Prime Minister being at the forefront of "negotiations" in these investment drives.

A foreign affairs adviser is one thing - but if he is to continue to drive high-level investment engagement it would make sense to task a special group within the Department of Prime Minister and Cabinet to transparently support his endeavours and ensure that those being wooed understand what the limits are to his engagement.

It is important that New Zealand - and Key is as good a political salesperson as any - does champion New Zealand's place in the film industry's global supply chain.

A fact sheet the PM's people released to explain his mission said that North America contributes between 80 and 90 per cent of all international screen revenue in New Zealand.

Last year it represented an investment in the New Zealand economy of $387 million - a rise of 30 per cent on the previous year. There were plenty more compelling metrics on the fact sheet.

But there are other strategic issues in play.

With China's rise, it is inevitable that the US film industry will increasingly be wooed to put more production in that growing economy.

James Cameron has already made a move in that direction by launching a joint-venture in Tianjin to leverage Chinese companies' expertise in 3-D to meet demand for product across various platforms such as tablets in a Government-backed venture.

Incentives will inevitably be offered to attract the US film industry to China.

Chinese ticket sales - while still only a fraction of the US film industry revenue - are rapidly growing. US ticket sales are moribund.

By stressing New Zealand's importance in the production space (and let's face it Kiwis are still in the vanguard here) to the US film industry supply chain, Key can send a strong message that the New Zealand market is worth preserving as a trusted player between the global giants.

There is a suggestion that Cameron will use Chinese 3-D technology in the two sequels to Avatar which he has previously said would "most likely" be filmed here, Key will want to nail that down in talks with Cameron who has since invested in Wairarapa farms and proposes to become a New Zealand resident.

Dave Gibson's Gibson Group has recently moved into the Chinese market making a series for television.

Michael Stedman's Natural History Group is well-established with its superb documentary series which are screened on CCTV.

But the heart of our New Zealand industry is still the skilled people employed here working alongside industry legends like Sir Peter Jackson and South Pacific Pictures John Barnett.

Key's Government changed our employment laws to keep Jackson's The Hobbit series here. He will also let the studio heads know incentives such as the big budget film rebates are available for all foreign movies.

It is inevitable that the Dotcom saga will get raised during Key's trip.

He will have to be very judicious in his comments given potential legal action against those responsible for the unlawful raid.

But at the end of the day it is the NZ film industry with its valuable Hollywood linkages that adds real value to this economy - not Kim Dotcom.

There is a structural shift under way in the film industry and New Zealand must protect its place in the global supply chain.

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.